JACOBS VEHICLE SYSTEMS, INC. v. YANG

Filing 20

MEMORANDUM OPINION AND ORDER signed by JUDGE THOMAS D. SCHROEDER on 9/10/2013; that JVS's objection to Yang's declaration (Doc. 16 ) is SUSTAINED IN PART and OVERRULED IN PART. The court will consider the declaration and exhibits for the purposes noted herein. FURTHER that Yang's motion to dismiss (Doc. 12 ) is GRANTED IN PART AND DENIED IN PART. It is GRANTED to the extent that the general allegations of the Trade Secret Protection Act claim identified in paragraph 54 of the amended complaint fail to state a claim upon which relief can be granted, and those allegations are DISMISSED WITHOUT PREJUDICE; in all other respects, Yangs motion is DENIED. (Sheets, Jamie)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

JACOBS VEHICLE SYSTEMS, INC.,

)
)
)
)
)
)
)
)
)

Plaintiff,
v.
ZHOU YANG,
Defendant.

1:12cv00181

MEMORANDUM OPINION AND ORDER
THOMAS D. SCHROEDER, District Judge.
Plaintiff,
that

Jacobs

Defendant,

misappropriated

Zhou
its

Vehicle
Yang
trade

Systems,

(“Yang”),
secrets

Inc.
its

and

(“JVS”),
former

other

alleges

employee,

confidential

information in violation of an employment agreement and North
Carolina statutory and common law.

Before the court is Yang’s

motion to dismiss pursuant to Federal Rules of Civil Procedure
12(b)(1),

12(b)(6),

12(b)(7),

and

19

(Doc.

12),

and

JVS’s

objection to a declaration submitted by Yang in support of his
motion (Doc. 16).

For the reasons set forth below, Yang’s

motion to dismiss will be granted in part and denied in part,
and JVS’s objection will be sustained in part and overruled in
part.
I.

BACKGROUND
The amended complaint, viewed in the light most favorable

to JVS, alleges the following:

JVS is a Delaware corporation with its principal place of
business in Bloomfield, Connecticut. (Doc. 9 ¶ 3.)
wholly-owned

subsidiary

of

Danaher

Corporation

It is a

(“Danaher”),

a

global conglomerate with its headquarters in Washington, D.C.
(Id. ¶ 7.)
brakes,

JVS primarily manufactures engine brakes, exhaust

engine

retarders,

and

engine

retarding

systems

under

such trademarks as “Jake Brake” and has secured many patents
from the United States Patent Office.

(Id. ¶¶ 11, 13, 15.)

It

also keeps some inventions confidential by choosing not to file
patents.

(Id. ¶ 15.)

In April 1998, JVS hired Yang as a senior engineer.
¶¶ 16, 24).

(Id.

Upon accepting employment, Yang signed an Employee

Confidential

and

Proprietary

Information

Agreement

(the

“Agreement”) by which he agreed not to publish, disclose, or use
at

any

time

during

or

subsequent

to

his

employment

“any

information, knowledge or data of [JVS] or its customers which
[he]

may

receive

or

employment

relation

processes,

develop
to

machines,

during

inventions,

manufactures,

the

course

of

[his]

discoveries,

formulas,

compositions,

computer

programs, accounting methods, information systems or business of
financial plans or reports, proprietary information or other[]
matters

which

are

(Id. ¶¶ 18, 20.)

of

a

secret[]

and

confidential[]

nature.”

The Agreement also barred Yang from disclosing

at any time any matter “which relates to [JVS’s] past, present,
2

and

future

services

practices,

performed

business

affairs,

[JVS]

employees,

by

and

the

as

results

long

as

of

such

information is not publicly disclosed by [JVS] or was known to
[Yang] prior to the commencement of [his] employment with [JVS],
including

without

limitation,

any

business

plans,

marketing

strategies, processes, financial information, objectives, needs
intentions or policies of [JVS’s] manufacturing techniques and
practices.”

(Id.

¶

21.)

Finally,

Yang

agreed

that

all

inventions to which he contributed, whether or not patented,
remain the exclusive property of JVS and that, upon termination
for

any

reason,

he

must

return

drawings

possible inventions that were confidential.

or

blueprints

of

(Id. ¶¶ 22–23.)

As a senior engineer at JVS, Yang contributed to several
innovations or inventions.

For each of these, he was required

to fill out an Innovation Disclosure Form detailing the specific
developments

in

result,

had

he

especially

any

which

he

access

was
to

innovations

patent applications.

involved.
JVS’s

for

(Id. ¶ 25.)

(Id.

¶

confidential

which

JVS

chose

28.)

As

a

information,
not

to

file

Yang worked in this position

at JVS for nearly eight years before leaving to take a job with
another Danaher subsidiary, Gilbarco Veeder-Root (“Gilbarco”),
in 2006.

(Id. ¶ 26.)

During his employment with Gilbarco, Yang

continued to have access to JVS’s confidential materials because

3

he

submitted

additional

Innovation

Disclosure

Forms.

(Id.

¶ 27.)
Yang

resigned

from

Gilbarco

in

2008.

(Id.

¶

31.)

Eventually, he traveled to China and, although he continues to
live in North Carolina, began working for his current employer,
Shanghai Universoon Autoparts Co., Ltd. (“Universoon”), a direct
competitor of JVS’s sister company in China.
JVS

alleges

that

Yang

filed

or

caused

(Id. ¶¶ 4, 33–34.)

to

be

filed

sixteen

Chinese patents, listed in Appendix D of its amended complaint,
that are under Universoon’s name but which use or are derived
from protected JVS trade secret information.

(Id. ¶¶ 36, 38.)

Additionally, JVS alleges that Yang has applied for additional
patents in China using protected JVS trade secrets obtained from
Innovation Disclosure Forms or other confidential information to
which he had access while at JVS.

(Id. ¶ 39.)

On January 4, 2012, JVS sent a cease and desist letter to
Yang, advising him that it believed him to be in violation of
the Agreement and demanding that he cease his conduct and return
all confidential materials in his possession.

(Id. ¶¶ 41–42.)

Yang responded by denying all of JVS’s demands.

(Id. ¶ 43.)

Subsequently, JVS initiated this lawsuit.
JVS alleges that Yang committed several violations of North
Carolina statutory and common law, including breach of contract
(id.

¶¶

45–52),

misappropriation
4

of

trade

secrets

under

the

North Carolina Trade Secrets Protection Act (“TSPA”), N.C. Gen.
Stat.

§ 66-152

trade

et

practices

seq.

¶¶

53–60),

violation

in

(id.

of

N.C.

unfair

Gen.

and

Stat.

deceptive

75-1.1

(id.

¶¶ 66–71), conversion (id. ¶¶ 61–65), and civil conspiracy with
Universoon.

(Id.

¶¶

72–75.)

JVS

also

claims

that

Yang

was

unjustly enriched when he obtained compensation from Universoon
in exchange for disclosing protected trade secrets and other
confidential material.

(Id. ¶¶ 75–80.)

Yang now moves to dismiss the action on several grounds.
First, he contends that the case should be dismissed under the
doctrine
China.

of

forum

non

conveniens

in

favor

of

resolution

in

Second, he asserts that the amended complaint should be

dismissed pursuant to Federal Rules of Civil Procedure 12(b)(7)
and 19 for failure to join Universoon as a defendant.

Third, he

moves to dismiss for failure to state a claim upon which relief
can be granted on the ground that the amended complaint fails to
provide

notice

of

what

trade

secrets

he

has

allegedly

misappropriated and, because the other claims necessarily depend
on whether he misappropriated trade secrets or other protected
material, all six counts should be dismissed.
been fully briefed.
Each argument will be considered in turn.

5

The motion has

II.

ANALYSIS
A.

Objection to Yang Declaration

As

a

objection

preliminary
to

matter,

evidence

Yang

the

has

court

must

submitted

in

consider
support

JVS’s

of

his

motion to dismiss.

Yang has filed a declaration with several

attached

documents

written,

Chinese.

(Doc. 14.)

extent

it

is

either

wholly

or

in

part,

in

JVS objects to Yang’s declaration to the

submitted

in

support

of

the

motion

to

dismiss

pursuant to Rule 12(b)(6) on the grounds that it is improper
extrinsic evidence, and because attached exhibits 1 through 4
are in Chinese and no translation was provided.
Yang

argues

that

the

documents

are

simply

(Doc. 16.)

copies

of

those

referenced in the amended complaint and demonstrate that Yang
neither applied for nor owned the patents.
Courts
dismiss

may

“so

consider

long

authentic.”

as

documents

they

are

(Doc. 18.)

attached

integral

to

to
the

a

motion

complaint

to
and

Sec’y of State for Def. v. Trimble Navig. Ltd., 484

F.3d 700, 705 (4th Cir. 2007).

As such, the court can consider

“documents attached to the complaint, documents incorporated by
reference
without

in

the

converting

judgment.

Sun

complaint,
a

Chem.

motion

or
to

Trading

matters
dismiss

Corp.

v.

of
into
CBP

judicial
one

for

Res.,

notice”
summary

Inc.,

No.

1:01CV00425, 2004 WL 1777582, at *3 (M.D.N.C. July 29, 2004)
(internal

quotations

and

citation
6

omitted).

Because

Universoon’s patents are referenced in the amended complaint,
the court may consider them.

But Yang bears the burden on his

motions

to

submitting

Chinese

(without

dismiss,

and

any

by

translation)

he

documents

is

written

limited

to

in

whatever

value they have to a court that does not read Chinese.

The

court will also consider Yang’s declaration and attachments for
the purpose of his motion to dismiss on the grounds of forum non
conveniens.

Thus,

JVS’s

objection

is

sustained

in

part

and

overruled in part.
B.

Forum Non Conveniens

The court will next consider Yang’s motion to dismiss the
entire complaint on the grounds of forum non conveniens.
The common law doctrine of forum non conveniens applies
when

the

alternative,

more

convenient

forum

is

located

in

a

foreign country.

See Am. Dredging Co. v. Miller, 510 U.S. 443,

449 n.2 (1994).

When considering whether to dismiss an action

for forum non conveniens, the court must determine “whether the
alternative forum is: 1) available; 2) adequate; and 3) more
convenient

in

light

involved.”

Jiali Tang v. Synutra Int’l, Inc., 656 F.3d 242, 248

(4th Cir. 2011).
available

and

unnecessary.

of

the

public

and

private

interests

If the proposed alternative forum is not both
adequate,

Id.

at

the

249.

balancing
In

of

considering

interests
the

forum

is
non

conveniens factors, the court is not limited to the allegations
7

of the amended complaint but may rely on evidence presented by
the

parties.

See,

e.g.,

Erausquin

v.

Notz,

Stucki

Mgmt.

(Bermuda) Ltd., 806 F. Supp. 2d 712, 724 (S.D.N.Y. 2011).

Here,

Yang has filed a declaration in support of his motion.

(Doc.

14.)
Generally,

the

alternate

forum

is

available

defendant is “amenable to process” there.

if

the

Id. (citing Piper

Aircraft Co. v. Reyno, 454 U.S. 235, 255 n.22 (1981)).

Yang has

satisfied this element by submitting his declaration statement
(Doc. 14 ¶ 15) that he will consent to service of process in
China.

See Jiali Tang, 656 F.3d at 250 (“Synutra satisfied that

burden with affidavits stating that Plaintiffs were not barred
by a statute of limitations and that Synutra would not contest
service of process in China.”).
“A foreign forum is adequate when ‘(1) all parties can come
within that forum's jurisdiction, and (2) the parties will not
be deprived of all remedies or treated unfairly, even though
they may not enjoy the same benefits as they might receive in an
American court.’”

Id. at 249 (quoting Fidelity Bank PLC v. N.

Fox Shipping N.V., 242 F. App’x 84, 90 (4th Cir. 2007).

The

moving party bears the burden of showing that such an adequate
forum

exists.

Id.

A

number

of

Fourth

Circuit

cases

have

determined that China is an adequate forum for various types of
legal

disputes,

see,

e.g.,

id.
8

at

250–51;

Compania

Naviera

Joanna SA v. Koninklijke Boskalis Westminster NV, 569 F.3d 189,
202–05 (4th Cir. 2009), nor does JVS argue that China would be
inadequate or that it will be treated unfairly or deprived of
any remedy if this case is heard there.

JVS argues only that

the interest factors do not weigh in favor of dismissing the
case.

Therefore,

the

court

will

consider

forum for the resolution of this dispute.

China

an

adequate

See Compania Naviera

Joanna, 569 F.3d at 202 (citing Piper Aircraft, 454 U.S. at 254–
55) (finding that this standard must be met in order to consider
a forum inadequate).
The weighing of public and private interests is the heart
of the forum non conveniens inquiry.

In order to weigh the

interests in Yang’s favor and dismiss the case, the court must
find that “when weighed against [JVS’s] choice of forum, the
relevant public and private interests strongly favor” resolution
of this dispute in China rather than in North Carolina.

Jiali

Tang, 656 F.3d at 246 (citing Kontoulas v. A.H. Robins Co., 745
F.2d 312, 315 (4th Cir. 1984)).

Relevant factors include the

following:
(1) the ease of access to sources of proof; (2) the
availability of compulsory process for securing the
attendance of unwilling witnesses; (3) the costs of
obtaining the attendance of witnesses; (4) the ability
to view premises; (5) the general facility and cost of
trying the case in the selected forum; and (6) the
public
interest,
including
administrative
difficulties, the local interest of having localized

9

controversies decided at home, and the interest
trying cases where the substantive law applies.

of

Compania Naviera Joanna, 569 F.3d at 200.
Yang contends that this case has very little connection
with

North

Carolina.

In

fact,

Yang’s

permanent

address

in

Guilford County (Doc. 9 ¶ 4) appears to be the only mention of
North Carolina in any of the parties’ submissions.

During the

relevant period, Yang was either working for JVS in Connecticut,
its sister company, Gilbarco (at which location is not readily
apparent in the record), or Universoon, located in China.
¶

4.)

This

case

involves

JVS’s

trade

secrets

and

(Id.
other

confidential materials that have allegedly been misappropriated
by

Yang,

to

Universoon’s

Universoon’s Chinese patents.

benefit,

and

are

reflected

in

While it is unclear whether Yang

committed any of the alleged acts of misappropriation in North
Carolina,

it

is

unlikely

that

any

third-party

witnesses

who

would be deposed are currently in North Carolina -- they are
likely either in Connecticut or China.
Considering all relevant factors, the court cannot say that
they strongly favor China as a more convenient forum. 1

First,

the sources of proof are mostly documents and the testimony of
witnesses.

The written documentation can be viewed in either

1

Because Yang did not make an alternative motion to transfer to the
District of Connecticut under 28 U.S.C. § 1404(a), this court
considers only whether to dismiss on the grounds of forum non
conveniens for re-filing in China.

10

forum, with some translation necessary whether the case is heard
here or in China.

Evidence of JVS’s trade secrets that were

allegedly misappropriated appears to exist in Connecticut, where
Yang

concedes

he

worked,

not

in

China.

Proof

of

misappropriation will depend (at least in part) on materials in
Yang’s
patents

possession
(which

misappropriated
China.

(either

allegedly

here

or

indicate

information),

and

in
or

China),
are

the

documents

the

Universoon

product

and

of

witnesses

the
in

Thus, there are access issues no matter where the case

is heard.
Second, the availability of compulsory process to require
Chinese nationals to testify in this district is nonexistent, as
such persons are beyond this court’s subpoena power.

Fed. R.

Civ. P. 45; Litetronics Int’l, Inc. v. Tech. Consumer Prods.,
Inc., No. 03 C 5733, 2006 WL 2850514, at *2 (N.D. Ill. Sep. 28,
2006)(unpublished)(noting

that

Chinese

subpoena power of the court).

parties

are

beyond

the

As a result, many Universoon

employees may be unavailable for testimony should the case be
heard in North Carolina.

While their testimony may be preserved

by deposition, this factor favors China as the more convenient
forum.
Similarly, the cost of obtaining the testimony of witnesses
in this district may be high.
China,

JVS

would

be

highly

But if the case were heard in
inconvenienced
11

by

the

cost

of

transporting all of its witnesses overseas.

This third factor,

therefore, is essentially a wash.
No party has argued that the fourth factor – a premises
view – is relevant in this case.

Indeed, the physical evidence

consists of the Innovation Disclosure Forms, other documents,
and Chinese and U.S. patents and applications.

Inspection of

premises does not appear to be necessary.
The parties have not articulated any cost analysis – the
fifth factor.

However, it would appear that the case would be

less costly to try in the present forum.

Yang lives here, and

JVS is located in Connecticut, which is much closer to this
forum than to China.

Trying the action in China would work a

hardship on both JVS and Yang.
Finally, the public interest factors do not strongly point
toward China.

JVS seeks to protect its alleged trade secrets

(developed in the United States) against a former employee who
it claims has misappropriated them for the benefit of a JVS
competitor in China.

While the controversy will likely affect

Chinese interests because Universoon is competing against JVS’s
sister company in the Chinese brake market, it also affects the
integrity

of

JVS’s

contractual

interests in the United States.

and

intellectual

property

The lawsuit alleges violations

of North Carolina law - something with which this court is more
familiar

than

a

Chinese

court.
12

Moreover,

this

district

can

decide

the

case

in

a

timely

manner.

It

serves

the

public

interest to ensure that a United States owner of intellectual
property

has

a

forum

to

seek

redress

for

another United States citizen living here.

alleged

misuse

by

As a United States

corporation, JVS has chosen to sue in the United States rather
than

in

China.

deference.

This

choice

is

ordinarily

given

significant

See SAS Institute, Inc. v. World Programming, Ltd.,

468 F. App’x 264, 266–67 (4th Cir. 2012) (noting that “‘[T]he
standard of deference for a U.S. plaintiff's choice of a home
forum permits dismissal only when the defendant ‘establish[es]
such oppressiveness and vexation to a defendant as to be out of
all proportion to plaintiff's convenience, which may be shown to
be slight or nonexistent.’”

(quoting Duha v. Agrium, 448 F.3d

867, 873–74 (6th Cir. 2006))). 2
Thus, consideration of all the relevant factors does not
strongly favor China over North Carolina as a more convenient
forum for this dispute.

Dismissal on the grounds of forum non

conveniens is a harsh result in many cases, including this one.
While there may be no truly “convenient” forum to resolve this
dispute, on this record this court will not disturb JVS’s choice
of forum.

See Fairchild Semiconductor Corp. v. Third Dimension

2

See Collins v. Pond Creek Mining Co., 468 F.3d 213, 219 (4th Cir.
2006) (recognizing that “we ordinarily do not accord precedential
value to our unpublished decisions” and that such decisions “are
entitled only to the weight they generate by the persuasiveness of
their reasoning” (citation omitted)).

13

Semiconductor, Inc., 589 F. Supp. 2d 84, 93 (D. Me. 2008) (“I
cannot

conclude

that

the

Chinese

forum

is

preferable

for

resolving this entire license royalty dispute”).
For the foregoing reasons, Yang’s motion to dismiss on the
grounds of forum non conveniens is denied.
C.

Failure to Join a Required Party

Yang next argues that the complaint should be dismissed
because JVS failed to join Universoon as a defendant.
argues

that

Universoon

is

JVS’s

real

target

and

Yang

this

court

cannot provide the relief requested – assignment of the Chinese
patents
(Doc.

at

13

issue

at

necessary

alleges

that

without

19-20.)

(the

indispensable,

–

as
Yang

JVS

current
JVS

exercising
argues

terminology

seeks

breached

that

no
the

remedy

jurisdiction
Universoon
is

is

and

it

nor

but

violated

Carolina law in misappropriating JVS’s trade secrets.

it.

neither

“required”)

against

Agreement

over

only
North

(Id.)

Federal Rule of Civil Procedure 19(a)(1) provides that a
person is a required party if either
(A)

in that person's absence, the court cannot accord
complete relief among existing parties; or

(B)

that person claims an interest relating to the
subject of the action and is so situated that
disposing of the action in the person's absence
may:
(i) as a practical matter impair or impede the
person's ability to protect the interest; or

14

(ii) leave an existing party subject to a
substantial risk of incurring double, multiple,
or otherwise inconsistent obligations because of
the interest.
“Rule 19 creates a two-step inquiry: first, whether a party is
necessary to a proceeding because of its relationship to the
matter under consideration; and second, if a necessary party is
unavailable, whether the proceeding can continue in that party's
absence.

If

it

cannot,

the

action should be dismissed.”

party

is

indispensable

and

the

Teamsters Local Union No. 171 v.

Keal Driveway Co., 173 F.3d 915, 918 (4th Cir. 1999) (citation
omitted) (footnote omitted).

Courts are loath to dismiss cases

based on nonjoinder of a party, and thus “dismissal will be
ordered only when the resulting defect cannot be remedied and
prejudice

or

inefficiency

will

certainly

result.”

Owens-

Illinois, Inc. v. Meade, 186 F.3d 435, 441 (4th Cir. 1999).
Yang

argues

that

the

court

will

not

be

able

to

accord

complete relief among the parties without Universoon because it
owns the rights to the Chinese patents, which cannot be assigned
if Universoon is not a party to the case.

However, in this case

JVS seeks only remedies against Yang: assignment of JVS’s rights
that

Yang

purports

to

enjoy;

return

of

trade

secret

and

protected materials Yang allegedly misappropriated; recovery of
damages from Yang; an accounting of all proceeds Yang received
as a result of unlawful conduct; and an injunction preventing

15

Yang from disclosing trade secrets to any third party, including
Universoon.

(Doc. 9 at 20-22.)

Universoon’s
Universoon

presence

may

have

to

These remedies do not depend on

defend

benefitted

its

rights

in

its

patents.

from

Yang’s

alleged

unlawful

conduct, but JVS seeks no recovery against it, and it is not a
required party. 3

To the extent Universoon may have knowledge of

facts helpful to the case, the parties may conduct discovery in
China.

Therefore, Yang’s motion to dismiss pursuant to Rule

12(b)(7) and Rule 19 will be denied. 4

3

The court need not therefore examine whether Universoon meets the
higher standard of an indispensable party under Fed. R. Civ. P. 19(b).

4

The court does not find Invesco Institutional (N.A.), Inc. v. Paas,
Civ. No. 3:07-CV-0175-R, 2008 WL 4858210, at *11 (W.D. Ky. Nov. 7,
2008), upon which Yang relies, to require a different result. In that
case, the plaintiff sought to enjoin its former employees from using
its investment software and know-how (which was allegedly protected)
with their new employer. After the plaintiff amended its complaint to
seek to enjoin the employees from developing or using the new
employer’s software, the new employer moved to intervene under Rule
24, contending that the plaintiff’s requested injunction against the
employees might impair the new employer’s ability to use and protect
its software. The court permitted the new employer to intervene, but
then found that the new employer was a required party under Rule
19(a)(1)(B) because its software on which the employees were working
was an interest that could be impaired without its presence in the
case.
The court concluded that the new employer was indispensable
and, because its presence would destroy the court’s diversity
jurisdiction, dismissed the action. Id. at *12–13.
Here, JVS does not seek to enjoin Yang from working for
Universoon (perhaps because Yang’s covenant not to compete had a two
year term and appears to have expired long ago (Doc. 9–3 ¶ H,)) nor
does it seek to claim rights to any of Universoon’s property. Whether
JVS intends to do that in a subsequent action is not before the court.
Rather, as relevant here, JVS has limited its requested relief to an
assignment of any rights Yang claims to have and to an injunction
preventing Yang from using JVS’s trade secrets to benefit any third
party, including Universoon.
Although JVS may not be able to obtain
entirely satisfactory relief by suing only Yang and not third parties,

16

D.

Rule 12(b)(6) Motion

Yang
failure

moves

to

finally

state

a

to

claim

dismiss
upon

the

which

entire

relief

complaint

can

be

for

granted,

largely on the ground that it fails to identify the alleged
trade

secrets

with

specificity.

Because

the

allegations

of

misappropriation are integral to all the causes of action of the
complaint, Yang argues, the entire action should be dismissed
for

failure

to

meet

this

standard.

JVS

contends

that

its

allegations are sufficient for Yang to know what he is claimed
to have misappropriated.
Federal Rule of Civil Procedure 8(a)(2) provides that a
complaint must contain a short and plain statement of the claim
showing that the pleader is entitled to relief.

Under Federal

Rule

must

of

Civil

Procedure

12(b)(6),

“a

complaint

contain

sufficient factual matter . . . to ‘state a claim to relief that
is plausible on its face.’”

Ashcroft v. Iqbal, 556 U.S. 662,

678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 570 (2007)).
pleads

factual

reasonable

A claim is plausible “when the plaintiff

content

inference

misconduct alleged.”

that

that

allows

the

the

defendant

court
is

to

liable

draw

the

for

the

Iqbal, 556 U.S. at 678 (quoting Twombly,

550 U.S. at 557).

that is a risk it may choose to take. See id. at *10–11 (noting that
the plaintiff need not seek relief against all potential tortfeasors).

17

1.

Misappropriation of trade secrets

The elements of a prima facie case for misappropriation of
trade secrets under North Carolina law are “(1) [the defendant]
knows or should have known of the trade secret; and (2) [the
defendant]

has

had

a

specific

opportunity

to

acquire

it

for

disclosure or use or has acquired, disclosed, or used it without
the express or implied consent or authority of the owner.”
Gen. Stat. § 66-155.

N.C.

A trade secret is defined as

business or technical information, including but not
limited to a formula, pattern, program, device,
compilation of information, method, technique, or
process that:
a. Derives independent actual or potential commercial
value from not being generally known or readily
ascertainable
through
independent
development
or
reverse engineering by persons who can obtain economic
value from its disclosure or use; and
b. Is the subject of efforts that are reasonable under
the circumstances to maintain its secrecy.
Id.

§

66-152(3).

Misappropriation

is

the

“acquisition,

disclosure, or use of a trade secret of another without express
or implied authority or consent, unless such trade secret was
arrived at by independent development, reverse engineering, or
was obtained from another person with a right to disclose the
trade secret.”

Id. § 66-152(1).

In cases involving trade secrets, the pleading standards
require specificity because of the subject matter at issue.

“To

properly plead a claim for misappropriation of trade secrets
18

under the TSPA, ‘a plaintiff must identify a trade secret with
sufficient

particularity

so

as

to

enable

a

defendant

to

delineate that which he is accused of misappropriating and a
court to determine whether misappropriation has or is threatened
to occur.’”

River’s Edge Pharm., LLC v. Gorbec Pharm. Servs.,

Inc., No. 1:10CV991, 2012 WL 1439133, at *13 (M.D.N.C. Apr. 25,
2012) (quoting Washburn v. Yadkin Valley Bank & Trust Co., 190
N.C. App. 315, 326, 660 S.E.2d 577, 585 (2008)).
Yang

points

to

several

cases

that

have

found

vague

or

overbroad allegations to be insufficient to state a TSPA claim.
See, e.g., McElmurry v. Alex Fergusson, Inc., 2006 WL 572330 at
*19

(M.D.N.C.

2006)

(denying

defendant’s

motion

for

summary

judgment on the TSPA claim but agreeing with the defendant that
“Plaintiff's claim to ‘any information’ that it had on Hatfield
as a trade secret is not specific enough to alert Defendant or
the

court

to

what

Plaintiff

alleges

Defendant

has

misappropriated”); Washburn, 190 N.C. App. at 327, 660 S.E.2d at
586

(granting

motion

to

dismiss

in

favor

of

counterclaim

defendant when the counterclaim plaintiff alleged vaguely that
the defendant “‘acquired knowledge of [the plaintiff’s] business
methods;

clients,

their

specific

requirements

and

needs;

and

other confidential information pertaining to [the plaintiff’s]
business,’ . . . [that] ‘confidential client information and
confidential business information’ constituted trade secrets as
19

defined by the TSPA[;] and that ‘[the plaintiff] believes [the
defendants] used its trade secrets on behalf of AF Financial
without [the plaintiff’s] permission.’”); Analog Devices, Inc.
v. Michalski, 157 N.C. App. 462, 468–69, 579 S.E.2d 449, 454
(2003)

(finding

that

the

plaintiff

“has

made

general

claims

concerning areas of ADC production and design and requested a
preliminary injunction that acts as an absolute bar to Maxim's
future efforts in ADC research through its employees, Michalski
and Karnik.”); but see ACS Partners, LLC v. Americion Group,
Inc., No. 3:09cv464, 2010 WL 883663, at *10 (W.D.N.C. Mar. 5,
2010) (denying defendant’s motion to dismiss because plaintiff’s
allegation

that

defendant

misappropriated

its

pricing

methodology was sufficiently particular).
Yang
Mineral

also

Co.,

relies

899

F.

heavily
Supp.

on

1477

FMC

Corp.

(W.D.N.C.

v.

Cyprus

1995),

Foote

where

the

manufacturer of lithium batteries sued its former employee to
prohibit the disclosure of trade secrets.

The plaintiff claimed

protectable trade secrets in the “design or modification” of:
“battery-quality lithium metal cells,” “battery-quality lithium
foil

extrusion

lithium

ingot

techniques

and

dies

and

casting

winding

and

technology

technology,”

purification
for

“battery-quality

technology,”

battery-quality

“stamping

lithium

parts,”

“battery-quality lithium alloys,” “as well as work with respect
to

.

.

.

the

lamination

of

current-collecting
20

materials

to

battery-quality lithium metals,” and “the sealing and packaging
of battery-quality lithium parts.”
found

that

particular

this
and,

general

if

Id. at 1480.

description

permitted,

would

was

not

The court
sufficiently

effectively

preclude

the

employee “from doing any work in his general area of expertise.”
Id.
JVS relies on River’s Edge.

There, the plaintiff hired the

defendant to develop know-how for a specific type of product,
but the defendant allegedly misappropriated what he was paid to
develop before sharing the full extent of his innovations with
the plaintiff.

River’s Edge, 2012 WL 1439133, at *13.

Because

the plaintiff was understandably unaware of the extent of the
defendant’s

work

developed

for

the

plaintiff’s

benefit,

the

court found that the following contention as to misappropriation
sufficient:

“whatever [defendant] continues to claim ownership

of, in relation to the dozens of projects it has undertaken for
[plaintiff],

is

what

misappropriating.”

Based

[defendant]
on

the

nature

is
of

accused
the

of

defendant’s

engagement, the court found, the defendant and the court had the
ability

to

delineate

misappropriating.

what

the

defendant

was

accused

of

Id. at *13–14.

Neither FMC nor River’s Edge is directly on point, but each
has

some

application

here.

In

FMC,

the

issue

was

not

the

sufficiency of the complaint, but rather whether the plaintiff
21

met

the

then-applicable

injunction.

standard

See id. at 1481.

for

entry

of

a

preliminary

Yet, the court observed that the

trade secrets claimed by the plaintiff “implicate almost every
stage in the production of battery-quality lithium metals” that
would effectively prohibit the employee from working at all.
Id. at 1482.

River’s Edge involved a unique situation where the

defendant’s knowledge of the trade secrets was superior to that
of the plaintiff.

Here, JVS cannot claim that it does not know

what Yang was doing while in its employ.
helpful

in

resuscitating

any

FMC therefore is not

general

allegations

of

misappropriation in the amended complaint.
Here,

JVS

has

articulated

sixteen

specific

Universoon

patents it believes contain information that derived from JVS’s
protected trade secrets and thus form the basis of JVS’s claim
that Yang misappropriated them.

(Doc. 9 ¶¶ 47-50, 57.)

Yang

argues that this only encourages him to find the “needle in the
patent application haystack.”

(Doc. 17 at 6.)

But JVS is not

required to disclose in detail that which it contends is trade
secret protected.

By providing Yang with the specific Chinese

patents for specific products, JVS has put him on notice of the
alleged trade secrets he is accused of misappropriating. 5

5

To

Yang’s argument that information can no longer be a trade secret if
it is disclosed by JVS in a patent application is unpersuasive at this
stage.
See, e.g., Giasson Aerospace Sci., Inc. v. RCO Engineering,
Inc., 680 F. Supp. 2d 830, 841 (E.D. Mich. 2010) (holding that where

22

this extent, therefore, JVS has provided a sufficiently specific
description of the specific products/information it contends is
subject to its trade secret claim. 6
The

amended

complaint’s

boilerplate

stand on such a firm footing, however.
over

such

broad

information,”
programs,

relating
research,

“customer

devices,

techniques,

as

to

categories

well

the

information

invention,

development,

of

or

design,

not

or

technical

formulas,

patterns,

information,
embodied

in

manufacture,

production

do

They seek protection

“business

specifications,

compilations
as

as

allegations

of

methods

or

documentation
formulation,

engine

retarding

systems, valve actuation systems, and/or engine brakes sold of
[sic] offered for sale by JVS.”

(Doc. 9 ¶ 54.)

Even given

Yang’s knowledge of his area of expertise at JVS, these general
allegations do nothing to notify him of what JVS alleges is
actually a protected trade secret that he has misappropriated.
Accordingly, these allegations are insufficient to state a TSPA
claim.
Yang’s motion as to the misappropriation of trade secrets
claim will therefore be granted in part and denied in part.

the claimed trade secrets are broader than the patented material, the
existence of a trade secret is not necessarily foreclosed).
6

There are mechanisms for obtaining additional specificity as to
alleged trade secret violations, including a motion for more definite
statement and contention interrogatories, pursuant to Federal Rules of
Civil Procedure 12(e) and 33, respectively.

23

2.

Breach of Contract

Yang moves to dismiss the breach of contract claim on the
ground

that

it

incorporates

the

allegations

of

trade

secret

misappropriation that he contends are insufficiently pleaded. 7
Yang’s argument is unpersuasive.

JVS’s breach of contract

claim is broader than its TSPA claim; for example, it includes
alleged

breaches

relating

to

Yang’s

claims

of

ownership

in

inventions and innovations he acknowledged in the Agreement were
the exclusive property of JVS.

See Doc. 9 ¶¶ 22, 48-50.

In

addition, to the extent the breach of contract claim rests on
alleged

disclosure

or

misuse

of

trade

secrets,

the

court’s

finding that JVS has sufficiently pleaded misappropriation of
trade secrets disposes of Yang’s contention that the breach of
contract
plausible

claim

must

breach

of

be

dismissed.

contract

claim,

Thus,
having

JVS

has

alleged

pleaded
that

a

the

parties entered into the Agreement, Yang subsequently breached
that Agreement through several acts that include disclosure and
misuse of trade secrets and other confidential material, and JVS
suffered damages as a result.

At this stage, these allegations

are sufficient to make a breach of contract plausible, and the

7

Yang relies on Bioquell, Inc. v. Feinstein, Civil No. 10-2205, 2010
WL 4751709, at *6 (E.D. Pa. 2010) for the proposition that “in the
context of a cause of action for breach of a confidentiality agreement
or conversion,” a plaintiff must identify the trade secrets
misappropriated.
(Doc. 13 at 14.)
Bioquell is no more than a
standard application of the heightened pleading standard to a trade
secret claim under state law (Pennsylvania).

24

motion to dismiss will be denied.
3.

Conversion

Yang argues in summary fashion that the amended complaint’s
allegations of conversion fail Iqbal’s plausibility standard.
North Carolina law defines conversion as “an unauthorized
assumption and exercise of the right of ownership over goods or
personal chattels belonging to another, to the alteration of
their

condition

or

the

exclusion

of

an

owner's

rights.”

Griffith v. Glen Wood Co., Inc., 184 N.C. App. 206, 213, 646
S.E.2d

550,

(emphasis

556

(2007)

deleted).

alleging

that

JVS

Yang

has

(internal
has

quotation

properly

possession

marks

pleaded

of

omitted)

conversion

tangible

paper

by

items

legally belonging to JVS, including Innovation Disclosure Forms,
which

he

refuses

to

return

to

JVS.

See

J

&

J

Sports

Productions, Inc. v. Santillan, No. 1:11CV1141, 2012 WL 6738316,
at *4–5 (M.D.N.C. Dec. 28, 2012) (tangible property may be the
subject

of

a

conversion

claim

under

North

Carolina

law).

Therefore, the motion to dismiss with respect to the conversion
claim will be denied.
4.
“To

Unfair and Deceptive Trade Practices

succeed

on

a

claim

for

[Unfair

and

Deceptive

Trade

Practices], a plaintiff must prove: (1) defendant[] committed an
unfair

or

commerce;

deceptive

act

and

that

(3)

or

practice;

plaintiff
25

(2)

was

in

or

injured

affecting
thereby.”

Griffith, 184 N.C. App. at 217, 646 S.E.2d at 558 (internal
quotation

marks

omitted);

N.C.

Gen.

Stat.

§

75-1.1.

While

breach of contract by itself is insufficient to state an unfair
and deceptive trade practice claim, it may do so “if the breach
is

surrounded

by

substantial

aggravating

circumstances.”

Griffith, 184 N.C. App. at 217, 646 S.E.2d at 558.

“A practice

is unfair when it offends established public policy as well as
when

the

practice

unscrupulous,

is

immoral,

substantially

quotation

(internal

or

marks

unethical,

injurious

omitted).

to

oppressive,

consumers.”
contends

JVS

Id.
has

it

adequately pleaded an unfair and deceptive trade practice claim
because

it

has

alleged

that

Yang

not

only

breached

his

employment agreement with JVS, but violated the TSPA by taking
its

confidential

information

to

a

direct

competitor

in

the

Chinese market in return for compensation.
“A

violation

of

constitutes

an

§ 75-1.1.”

Medical Staffing Network, Inc. v. Ridgway, 194 N.C.

unfair

the
act

or

Trade

Secrets

practice

under

App. 649, 659, 670 S.E.2d 321, 329 (2009).

Protection
N.C.

Gen.

Act
Stat.

Because JVS has

properly pleaded that Yang violated the TSPA, such conduct would
constitute an unfair and deceptive trade practice as a matter of
law.

Thus, this court need not determine at this stage whether

JVS has alleged an additional, independent unfair and deceptive
trade practice claim premised on Yang’s alleged breach of the
26

Agreement.

Consequently, Yang’s motion to dismiss the unfair

and deceptive trade practice claim will be denied.
5.

Civil Conspiracy

Yang argues that the conspiracy claim (Count V) should be
dismissed because there is no separate civil cause of action for
conspiracy under North Carolina law and “[w]hen the substantive
claim falls, the civil conspiracy claim must also fall.”

(Doc.

13 at 20.)
To state a claim for civil conspiracy under North Carolina
law, a plaintiff must allege a conspiracy, an overt wrongful act
by one of the conspirators, and injury to the plaintiff.

See

Norman v. Nash Johnson & Sons' Farms, Inc., 140 N.C. App. 390,
416, 537 S.E.2d 248, 265 (2000).

However, a plaintiff cannot

use

the

the

same

conspiracy

to

facts

to

commit

form

both

certain

based on the underlying tort.

torts
Id.

and

basis
the

for

a

basis

claim
for

for

claims

But, as a general rule, both

North Carolina and the federal rules permit a plaintiff to plead
alternative theories of recovery based on the same conduct and
later

make

8(d)(2).

an

election

of

remedies.

Id.;

Fed.

R.

Civ.

P.

Because each member of a civil conspiracy is jointly

and severally liable for damages caused by the conspiracy, it is
not

necessary

to

join

all

co-conspirators.

See,

e.g.,

Kuhn

Const. Co. v. Ocean & Coastal Consultants, Inc., 723 F. Supp. 2d
676, 689 (D. Del. 2010).
27

JVS

has

alleged

that

Yang

conspired

with

Universoon

violate both the TSPA and Yang’s Agreement with JVS.

to

Because

Yang’s motion to dismiss is predicated on its contention that
the substantive claims should be dismissed, which the court has
rejected, Yang’s motion to dismiss the civil conspiracy claim
will be denied as well.
6.

Restitution for Unjust Enrichment

JVS’s final claim is for unjust enrichment.
dismiss

this

claim

with

only

the

general

Yang moves to

assertion

“do[es] not meet Iqbal’s plausibility standard.”

that

it

(Doc. 13 at

14.)
Under North Carolina law, a plaintiff asserting an unjust
enrichment claim must show it conferred a benefit on another,
the

other

party

consciously

accepted

that

benefit,

and

the

benefit was not conferred gratuitously. Se. Shelter Corp. v.
BTU, Inc., 154 N.C. App. 321, 330, 572 S.E.2d 200, 206 (2002).
A claim for unjust enrichment is neither in tort nor in contract
but is a claim in quasi-contract or contract implied in law,
which is not based on a promise but is imposed by law to prevent
unjust enrichment.

Booe v. Shadrick, 322 N.C. 567, 570, 369

S.E.2d 554, 556 (1988) (measure of damages is the reasonable
value of the goods and services to the defendant).
Ordinarily,
unjust

where

enrichment

there

claim

is

should
28

an

undisputed

be

dismissed.

contract,
See

the

Pan-Am.

Products & Holdings, LLC v. R.T.G. Furniture Corp., 825 F. Supp.
2d 664, 696 (M.D.N.C. 2011).
dismiss on this ground.

But here Yang has not moved to

Nor has he filed an answer to admit the

Agreement or acknowledged the validity of the Agreement in his
declaration.

Accordingly, the court will deny Yang’s motion to

dismiss this claim at this stage without prejudice to its being
raised at the appropriate time should it become clear that the
Agreement is undisputed and covers the same scope of any unjust
enrichment claim.
III. CONCLUSION
For the foregoing reasons,
IT

IS

THEREFORE

declaration
PART.

(Doc.

16)

ORDERED
is

that

SUSTAINED

JVS’s
IN

objection

PART

and

to

Yang’s

OVERRULED

IN

The court will consider the declaration and exhibits for

the purposes noted herein.
IT IS FURTHER ORDERED that Yang’s motion to dismiss (Doc.
12) is GRANTED IN PART AND DENIED IN PART.
extent

that

the

general

allegations

It is GRANTED to the

of

the

Trade

Secret

Protection Act claim identified in paragraph 54 of the amended
complaint

fail

to

state

a

claim

upon

which

relief

can

be

granted, and those allegations are DISMISSED WITHOUT PREJUDICE;
in all other respects, Yang’s motion is DENIED.
/s/
Thomas D. Schroeder
United States District Judge
September 10, 2013
29